Beverage industry goes all out to defeat Richmond soda tax measure

By Robert Rogers Contra Costa Times

Posted:
10/07/2012 12:00:00 PM PDT

Updated:
10/13/2012 06:21:28 AM PDT

Click photo to enlarge

Renowned graffiti artist Mike Rich from Portland, Maine, works on a 30' x 20' mural contrasting life in the throes of soda dependence put on by Richmond Fit For Life (yes on Measure N ) at the corner of 37th street and McDonald Blvd. in Richmond, Calif., on Friday Oct. 5, 2012. ( Dan Rosenstrauch/Staff)

RICHMOND -- In 2010, Meg Whitman spent $57 per vote on a campaign for governor that saturated California's airwaves and mailboxes like nothing the state had ever seen. Two years later, the beverage industry's campaign against a Richmond ballot measure makes Whitman's failed run look efficient by comparison, having spent nearly three times as much for each vote it anticipates it will need to win the election.

And there's still a month to go.

Radio and television ads are on a seemingly endless loop. "No on N" signage has become the city's de facto wallpaper.

"I've never seen anything like it," said Brian Drayton, executive director of Richmond SPOKES, a downtown bike shop. "Millions of dollars to prove something wrong. Millions to say no."

But for the American Beverage Association, a powerful Washington D.C.-based industry lobbying group, the $2.2 million investment to date is about much more than Richmond. Determined to head off the burgeoning movement to curb consumption of high-calorie drinks, the ABA is playing a national game of Whac-A-Mole, seeking to beat down soda regulations with its money and campaign expertise wherever such proposals arise. It has already succeeded in Washington, D.C., and Philadelphia, as well as states such as Texas and New York.

Now Richmond finds itself in the association's sights as it seeks to become the first city to levy a tax on businesses that sell sugar-sweetened beverages.

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"With Whitman, the money was canceled out in part because she was the face of the CEO, the 1 percent, and the image tied to the campaign was tough to overcome," said Jorge Contreras, founder of CSG Political Consulting in San Jose. "With a measure like this, without a clear face or a villain, the spending can be even more effective. This is American politics today."

In Richmond, campaign finance statements released Oct. 5 show the pro-Measure N campaign has spent $25,293, a pittance compared with the No on N campaign's $2.2 million surge. The anti-tax spending, which some expect to double by Nov. 6, is aimed at convincing about 15,000 voters, the expected number needed to pass or defeat the measure. That comes out to nearly $150 per vote.

Organizers sponsored by the American Beverage Association have no qualms about spending big to defeat the penny-per-ounce tax.

"We're going to spend what is necessary to inform voters about a misleading and misguided tax that will cost Richmond residents and businesses millions of dollars a year in higher grocery bills and lost sales and revenue," said Chuck Finnie of Barnes, Mosher, Whitehurst, Lauter & Partners, the San Francisco-based public relations firm hired by the association to coordinate the No on N campaign.

Anti-tax signs dot the city, on some streets seemingly in every storefront. On Macdonald Avenue, "No on N" is as subtle as a sledgehammer, bearing down from tall billboards, peeking out from windows and, in the case of local favorite CJ's Barbecue & Fish, covering almost all of the west-facing stucco wall.

At Caspers Hot Dogs, across the street from City Hall, a large "No on N" sign greets customers as they enter. Workers pour sugar-sweetened fountain drinks into 16-ounce paper cups. Each drink represents a potential 16-cent payment owed the city if voters pass the tax. Opposition among local merchants is solid.

Across the street from Caspers is the beverage industry-funded campaign office, where staffers work the phones and coordinate sign placement. Placards cover the exterior, and bright new maroon and yellow signs are piled 6 feet high, ready for deployment.

"No one asked parents how they want to address obesity in their own children," said the Rev. Andre Shumake, a longtime resident. "Once again, others trying to tell residents in low-income communities of color what's best for them."

In El Monte, a Los Angeles County suburb that followed Richmond by putting its own nearly identical beverage tax on the ballot, the political situation is the same. The beverage industry has spent nearly $1.3 million so far to defeat that city's measure.

"It's a domination by corporate interests that's similar to the early 1900s, when the railroad barons rode roughshod on the state."

Finnie says his clients' spending is "but a fraction of the economic loss that would result from a tax that would drive up the cost of living for residents and encourage people to shop elsewhere to avoid Measure N price hikes."

Supporters say the spending is evidence of how successful their campaign has been -- and how high the stakes are.

"They're spending more and more because they're not confident, and they know that Richmond can pave the way for more cities to protect children's health from their products," said City Councilman Jeff Ritterman, a retired cardiologist who is the leading proponent of the tax. "They have access to sophisticated polling data, so the fact that they're afraid and pouring money in is a good sign."

According to a May report published by the Center for Science in the Public Interest, beverage industry political spending nationwide is up sevenfold since 2005.

Julie Greenstein, deputy director of health promotion policy at the center, said the industry has followed a clear modus operandi: Stamp out new taxes and regulations before they're approved. Greenstein said the biggest spending spike came in 2009, when murmurs surfaced about a sugar-sweetened beverage tax within President Barack Obama's health care bill. The beverage industry responded with $40 million in lobbying and has remained on a plateau far above its pre-2009 spending ever since.

"The soda industry has pounded (Capitol) Hill," Greenstein said.

The pro-Measure N side is mostly volunteers led by Ritterman, who trudges around town on weekends pulling a wagon full of 40 pounds of sugar and spends nights arguing his points on social media platforms such as Facebook.

A companion measure advises the city to spend the $2 million to $4 million in annual proceeds on anti-obesity and recreation programs for the city's children, 52 percent of whom are classified as obese.

"Money talks, and you don't see spending disparities like this every day," said Bruce Cain, a UC Berkeley professor of political science. "It speaks to how important this is to the beverage industry."